Sallie Mae Pursuing Industrial Bank Charter

RESTON, VA – SLM Corporation, commonly known as Sallie Mae, the nation’s leading provider of education funding, today announced that it has incorporated a new subsidiary in Utah, Sallie Mae Bank, that has applied to the Federal Deposit Insurance Corporation and the Utah Department of Financial Institutions for an industrial bank charter.

“The industrial bank will allow us to fund and originate in our own name private credit education loans that we offer nationwide to students and families,” said Marianne Keler, executive vice president, Sallie Mae. “The bank will give us added flexibility in tailoring our products and services to our student and family borrowers.”

The company’s private education and career training loans will continue to be available to consumers through several of the company’s lending partners.

The bank’s deposits will include escrow, retail and brokered deposits. Proposed initial capitalization for the bank is $100 million, with total assets expected to grow to $1.2 billion by the third year of operation.

A single branch office is planned for Salt Lake City; however, the bank’s services will be provided nationally, primarily via telephone, Internet and mail. Upon final regulatory approval, the company will commence bank operations with a staff of approximately 15 employees. Sallie Mae recently appointed Mark B. Howard, former Chief Financial Officer of Volkswagen Bank, to lead Sallie Mae Bank operations as President and CEO.

Sallie Mae Bank will not have a material impact on the company’s 2005 earnings.